Monarch Networth Capital Ltd Management Discussions

Your Directors are pleased to present the Management Discussion and Analysis Report for the year ended on March 31, 2025. Investors are cautioned that these discussions contain certain forward-looking statements that involve risk and uncertainties, including those risks which are inherent in the Companys growth and strategy. The Company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this report consequent to new information or developments, events or otherwise.

GLOBAL ECONOMY

The world economy has shown resilience in 2024 despite headwinds from geopolitical tensions, supply chain shifts, changing trade patterns, and monetary policy adjustments. Inflation has stabilised after a period of decline, enabling central banks to turn more accommodative. Global headline inflation is projected to ease further to 4.2% in 2025 and 3.6% in 2026. The tariffs, acting as a supply shock, are expected to pass through to US consumer prices gradually and hit inflation in the second half of 2025. Elsewhere, the tariffs constitute a negative demand shock, lowering inflationary pressures.

According to the International Monetary Fund (IMF), global GDP growth held steady at 3.3% in 2024, matching the pace of 2023, and is projected to grow at 3.0% in 2025 and 3.1% in 2026. Persistent geopolitical tensions could push up commodity prices, disrupting the disinflation trend, while policy changes under the new US administration have heightened concerns over geo-economic fragmentation and trade risks. Emerging strategic trade hubs - nations with geographic advantages and preferential trade agreements - are expected to play an increasingly important role in the realignment of global commerce.

Financial conditions remain generally accommodative. Equity markets have rebounded strongly, credit costs have narrowed, and volatility is subdued, even as long-term yields in advanced economies have risen on wider fiscal deficits and heavier bond issuance. A weaker US dollar has lifted many emerging market currencies and drawn in capital flows, giving some central banks room to cut rates. However, high public debt levels and the possibility of renewed tariff hikes could reverse these gains, lifting borrowing costs and straining fiscal sustainability.

Source: World Economic Outlook-IMF, July 2025

INDIAN ECONOMY

Amidst the uncertain global economic environment, with elevated interest rates, persistent trade frictions, and geopolitical tensions, India continued to demonstrate resilience. Having advanced to become the worlds fourth-largest economy, it put up a strong performance in FY 2024-25, registering a GDP growth rate of 6.5%, maintaining its position as the fastest-growing major economy. This came at a time when the global economy was described by the United Nations as being in a precarious moment, underscoring the strength of Indias domestic growth drivers and prudent policies.

Manufacturing continued to contribute significantly to output, supported by stronger industrial capacity, rising competitiveness in high-value sectors such as defence production, electronics, and machinery, and record merchandise exports excluding petroleum products at US$ 374.1 bn, up 6.0% from the previous year. The services sector also displayed resilience, led by IT, consulting, finance, and digital technologies, with services exports reaching US$ 387.5 bn, a 13.6% increase over FY 2023-24. Overall, total exports hit a record US$ 824.9 bn in FY 2024-25, up 6.01% YoY, supported by healthy foreign investment inflows and stable macroeconomic conditions.

The Union Budget for FY 2025-26, presented in February 2025, reiterated the Governments commitment to infrastructure development, economic stability, sector-specific advancements, and long-term strategic positioning. By streamlining regulations, supporting MSMEs, and boosting investments and exports, the budget outlines a clear roadmap toward Viksit Bharat 2047. The budgets emphasis on sectors including tourism, healthcare, and manufacturing will catalyse job creation. These measures are expected to stabilise the macroeconomic environment, encouraging private sector participation and investment.

On the monetary front, inflation eased sharply, with the Consumer Price Index (CPI) falling to 1.55% (Provisional) in July 2025 - the lowest since June 2017 - while food inflation turned negative to -1.76%. This moderation, supported by robust crop production and low imported inflation risk, strengthened the outlook for price stability. Foreign exchange reserves stood at US$ 688.9 bn as of August 8, 2025, enough to cover more than 11 months of goods imports, while the current account deficit was contained at just 0.6% of GDP in FY 2024-25.

Looking ahead, the Reserve Bank of India projects GDP growth for FY 2025-26 to remain steady at 6.5%, supported by resilient domestic demand, stable macroeconomic fundamentals, and prudent policymaking. With a healthy external position, rising investment flows, and consistent performance in manufacturing and services, Indias fundamentals remain well placed to navigate global headwinds and sustain its growth leadership.

Source: PIB, MoSPI Press Release, Aug 12, 2025

INDUSTRY OVERVIEW

Stock broking

Within Indias vibrant capital market, the equity segment plays a dominant role, supported by robust Market Infrastructure Institutions (MII), comprising depositories, trading, settlement and record keeping corporation, among others. These tech-savvy institutions have been facilitating rapid growth in the base and depth of equity markets as the number of investor accounts with brokers and depositories has increased considerably, particularly in recent years. The NSE and BSE, Indias leading stock exchanges, have also claimed the global spotlight, sustaining Indias position as the worlds fourth-largest stock market (in terms of market capitalisation) even amid global uncertainties. Together, these exchanges host companies with a combined market capitalisation exceeding US$ 5.1 trillion - an achievement underscored by the resilient performance of benchmark indices like the Nifty and Sensex.

In FY 2024-25, global headwinds such as rising inflation, geopolitical tensions, and ongoing disruptions to global trade from U.S. tariffs have cast a shadow of uncertainty. Yet, domestic institutions have emerged as a stabilising force in the Indian equity market. Despite substantial FPI outflows in the second half of the year, the market closed FY 2024-25 with modest gains, reflecting the growing strength and confidence of domestic investors.

As Indias economy advances through greater formalisation and digital adoption, and as retail investor participation continues to rise, capital markets will remain central to the countrys growth trajectory. Although global developments and policy changes may introduce periods of volatility, the long- term prospects remain strong - driven by increasing per capita income, ongoing structural reforms, wider financial inclusion, and the emergence of a larger, more confident investor community.

Investment banking

Indias investment banking sector demonstrates immense potential and is expected to reach a revenue of US$ 16.53 bn by 2025 according to Statista. This surge is propelled by Indias robust economic performance and an uptick in merger and acquisition endeavours. Yet, the market anticipates a slight slowdown ahead, with a projected Compound Annual Growth Rate (CAGR) of 0.75% over the next five years to reach US$ 17.16 bn by 2030. Nevertheless, India maintains its significance on the global investment banking landscape, albeit trailing behind the US, which is projected to reach a staggering revenue of US$ 110.12 bn in 2025. As India continues to navigate this dynamic landscape, its investment banking sector remains a vital component of the nations financial ecosystem.

The Indian equity market is also in the spotlight for its IPO action. In 2024, India surged ahead as the global frontrunner in the number of IPOs as per EY. The first quarter of 2025 alone saw a remarkable fund raising of US$ 2.8 bn through 62 IPOs, securing 22% of the global share. This highlights a vibrant primary market landscape. Leading this surge were sectors like Industrials, Real Estate, Hospitality, Construction and Health & Life Sciences, indicating a diverse range of industries contributing to the IPO boom.

US$ 2.8 bn	62 IPOs
Of fundraising in Q1 CY 2025	In Q1 CY 2025

Asset management

Indias Alternative Investment Funds (AIFs) are attracting high-net worth investors seeking superior returns. As of March 2025, AIFs surpassed Rs 13.49 lakh crore in investment commitments, a ~35% YoY jump. These funds offer a broader range of investment options compared to traditional vehicles, attracting investors with a minimum investment of Rs 1 crore. Data from SEBI shows Rs 5.3 lakh crore has already been raised, with Category II and Category III AIFs accounting for Rs 3.7 lakh crore and Rs 1.5 lakh crore, respectively.

Rs 13.49+ lakh crore

AIFs investment commitments as of March 2025

The Assets Under Management (AUM) of domestic mutual funds (MFs) soared by an impressive 26% in FY 2024-25. According to AMFI annual data, the AUM reached a historic high of Rs 67.40 lakh crore as of March 2025, compared to Rs 53.40 lakh crore in March 2024, with an increase of nearly Rs 14 lakh crore over the last fiscal year. The AUM of Portfolio Management Services (PMS) has also witnessed remarkable growth, more than doubling over the past five years.

From Rs 15.40 lakh crore in January 2019, it surged to Rs 38.66 lakh crore as of March 31, 2025. PMS offerings provide tailored advice, focussed mandates, and access to specialised tools, contributing to their increasing popularity and expanding AUM.

Rs 67.40 lakh crore

Historic high MF AUM as of March 2025

COMPANY OVERVIEW

Monarch Networth Capital Limited (hereafter referred as MNCL or the Company) is a prominent player within the Indian financial services industry. The firm has garnered three decades of experience in developing and implementing innovative financial products and strategies. This rich heritage has positioned Monarch Networth Capital as a leading and reliable provider of financial services with a strong presence with 3,00,000+ registered clients across 140+ cities in 20+ states through 55 branches and 900+ business associates.

3,00,000+	140+	20+	55	500+
Registered clients	Cities	States	Branches	Business associates

Over the years, Monarch Networth Capital Limited has strategically expanded its offerings beyond pure stock broking services. Today, the Company provides a comprehensive suite of financial products and services to cater to its clients diverse needs. The core offerings of the Company include retail broking - the long-standing original business, wealth and third-party product distribution, global access, institutional equities, investment banking, and asset management. Following a foray into the asset management business through AIF, MNCL has received in-principle approval from SEBI to establish mutual fund operations, consolidating its position in the burgeoning asset management sector. This comprehensive approach ensures that clients have access to a wide range of financial solutions, all supported by a team of experienced research experts, robust infrastructure, and well-defined processes.

The Company attributes its progress to its customer- first approach, which has always been its priority. Actively engaging with clients has enabled the Company to understand their unique financial needs and goals. This commitment fosters long-lasting relationships built on trust and personalised service.

The Companys dedication to client success is reflected in its core values:

Simplified investing: Strive to make investing accessible and intuitive, empowering individuals to confidently navigate the financial landscape.

Rewarding opportunities: Identify and offer a diverse range of investment solutions with the potential for positive returns. Many of the relatively new businesses were set up as the Company felt there were gaps in servicing the existing clients.

Domain insights: The team of experienced employees provides insightful research and analysis to guide informed investment decisions.

Comprehensive solutions: Extensive product portfolio allows MNCL to tailor financial strategies that align with each clients specific objectives.

Further, MNCL leverages technology to enhance the customer experience. The Company actively deploys technological advancements for client acquisition, improved customer activation, and streamlined business processes. This commitment to technological innovation ensures a seamless and efficient experience for its valued clientele. Technology is a major area of investment and engages top management attention significantly.

OPPORTUNITIES AND THREATS

Opportunities

Favourable long-term economic prospects create fertile ground for growth in financial services.

A rising share of consumer spending bodes well for the financial services industry.

Streamlined regulations encourage wider participation from all investor demographics.

Technology adoption optimises best practices and processes within the Company.

Strategic corporate activity like mergers, acquisitions, and restructuring presents opportunities for corporate advisory services.

Mobilisation of domestic household and corporate savings to the capital market through managed investment solutions like Mutual Funds, AIFs, PMSs and Collective Investment Schemes.

Threats

Challenges in execution: In the event of any lapse in the execution of processes and strategies, overall operations will be impacted.

Economic downturn: A short-term economic slowdown could negatively impact investor confidence and overall business activity.

Constrained global liquidity: A decrease in global liquidity flows could limit access to capital.

Heightened competition: Competition from established local and global players in the financial services industry is intensifying.

Shifting investment trends: Market trends favouring alternative investment options may lead clients to explore avenues beyond core offerings.

RISK MANAGEMENT & INTERNAL CONTROL SYSTEM

As per the Provisions of Section 134(3) of the Companies Act, 2013 (the Act) the Company as a part of the Boards Report needs to give a statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. Additionally, as per the Listing Obligations and Disclosure Requirement Regulations (LODR), 2015, the Company is required to lay down procedures for risk assessment and risk minimisation.

The Company is exposed to specific risks that are particular to its business and the environment within which it operates, including economic cycle, market risks, competition risk, interest rate volatility, human resource risk and execution risk, etc. The Company mitigates these risks by enhancing its technological capabilities in surveillance mechanisms and by following prudent business and risk practices and adhering to standard policies and procedures adopted for risk management.

Compliance risk & responsive strategies: MNCL has established a dedicated department staffed with experienced professionals in compliance, corporate governance, legal, and audit functions. This robust team plays a vital role in guiding business units and support functions on all regulatory matters. They ensure adherence to current regulations and circulars through continuous monitoring and implementation. This comprehensive approach safeguards proper governance, reporting practices, and adherence to regulatory requirements across the entire Group.

Additionally, MNCL is committed to combating money laundering. The Company has implemented a robust system of controls and procedures, including:

Business-specific compliance manuals

Limit monitoring systems

Anti-Money Laundering (AML) and Know Your Customer (KYC) policies

Enhanced risk-based supervision systems

These policies and procedures are thoroughly communicated to all employees through compliance manuals and circulars. Additionally, in its broking business, the Company has implemented robust surveillance and risk management systems to further strengthen its compliance framework.

Through this proactive approach, MNCL fosters a culture of ethical conduct and ensures compliance with regulatory requirements, building trust and safeguarding the Companys reputation.

Human resource risk & responsive strategies:

The Company recognises the significance of a well- managed human resource department. MNCL continuously strives to align its HR practices with evolving business needs. The Company actively promotes a strong culture of transparency and service orientation within the organisation.

The Group prioritises the well-being of its employees by implementing people-centric policies and adopting best practices in HR management, including, but not limited to, health insurance. This commitment includes providing comprehensive training programmes on job functions and compliance-related topics.

Further, the HR department ensures strict adherence to all statutory labour laws and relevant regulations. In addition, thorough background screening procedures are implemented to minimise risks associated with new hires. These proactive measures contribute to building a strong and reliable workforce, essential for the Companys continued success.

Reputation risk & responsive strategies: At MNCL, ethical conduct is paramount. The Company empowers operating managers to reject substandard business opportunities, prioritising long-term success over quick fixes. This commitment is further solidified by its comprehensive employee code of conduct and trading guidelines, applicable to all staff.

Rigorous monitoring ensures adherence to these policies, with disciplinary actions in place for any deviations. This unwavering dedication to ethical practices serves a dual purpose: safeguarding its reputation and building trust with the clients.

The Company understands that reputational risk is a critical concern. MNCL proactively addresses any situation that could potentially damage its standing. Events with the potential for negative impact are handled with utmost caution, ensuring complete compliance and alignment with the core values. Through this vigilance, the Company fosters a culture of integrity and transparency, earning the trust of clients and stakeholders.

Risk culture & responsive strategies: Risk management is a cornerstone of MNCLs business strategy. The Company has cultivated a strong risk culture that encourages a comprehensive approach to identifying and managing risks across the entire organisation. Through continuous investment in people, processes, and technology, it strives to mitigate potential risks arising from both external factors and borrower behaviour.

A dedicated risk management team works in tandem with its robust credit operations structure to ensure timely identification and mitigation of risks. This proactive approach minimises potential impact on the Companys growth and performance. The Company has developed the capability to detect early warning signs of financial stress and established processes for corrective and remedial actions. This ensures MNCL maintains control and minimises potential damage. In essence, the Companys proactive risk management framework safeguards its resilience and paves the way for sustained success.

Rigorous oversight and internal controls: The

Board of Directors and Audit Committee work collaboratively to ensure regular reviews of the Companys risk management policies. This oversight ensures management effectively controls risk through clearly defined protocols.

Recognising that MNCL operates in a highly regulated industry, the Company leverages the inherent risk management measures embedded within the regulatory framework. The Company further strengthens its risk management posture by engaging an independent firm of Chartered Accountants to conduct comprehensive internal audits. These audits are reported regularly to the Audit Committee, providing an additional layer of scrutiny.

Further, the Company maintains a robust internal control system. This system safeguards company assets against unauthorised use or mismanagement. It further ensures that all transactions are:

Authorised: Only authorised personnel can initiate and approve transactions.

Recorded: All financial transactions are accurately captured and documented.

Reported: Financial information is reported accurately and in a timely manner.

Through these comprehensive measures, the Company ensures:

Compliance: Adherence to all applicable laws, regulations, listing requirements, and management regulations.

Accuracy: Financial transactions are properly recorded and verified.

Standards: The Companys financial reporting adheres to recognised accounting standards and policies.

By prioritising strong governance and robust internal controls, MNCL fosters trust among stakeholders and builds confidence in the accuracy and integrity of the Companys financial reporting.

Addressing economic and business risks: The

Indian capital markets performance is directly linked to the nations economic growth and political stability. While the Companys growth projections appear promising, potential downside risks remain. These include the pace and shape of the global recovery, the impact of scaling back fiscal stimulus, and rising commodity prices.

The Companys business performance may also be affected by:

Intensified competition: An influx of local and global players in the Indian market heightens competition.

Regulatory shifts: Evolving regulations can necessitate adjustments to business practices.

Employee turnover: High employee attrition rates can disrupt operations.

Meeting the challenge of competition: The

Company recognises the growing number of advisory firms offering combined services and funding options, creating a competitive landscape. To address this, the Company continuously strives to provide superior customised services that cater to the clients specific needs.

Mitigating risk in a financial services environment:

Effective risk management is paramount in the financial services industry. MNCL is actively involved in managing credit risk, liquidity risk, and interest rate risk. The Company has implemented robust mechanisms to effectively mitigate these risks.

Through a well-developed management information system, the Company continuously analyses and reviews all potential risks at various management levels. This proactive approach ensures timely identification and mitigation of risks, safeguarding the Companys financial health and sustainability.

DISCUSSION ON FINANCIAL/OPERATIONAL PERFORMANCE (CONSOLIDATED BASIS) (ON THE BASIS OF IND-AS)

Consolidated revenue from operations went up by 17.7% YoY, profit after tax by 21.2%, and net worth 130%. The robust revenue performance was due to all-round better outcomes of all businesses - old and new - partly due to market buoyancy and largely due to the efforts taken in the last five years to reorient our businesses to become more focussed and more nimble. Profitability did better than the top-line because of cost control, particularly employee expenses, without compromising at all on employee welfare.

(Rs in lakhs unless otherwise specified)

Particulars	FY 2024-25	FY 2023-24
Revenue from Operations	32,680.49	27,769.16
PBT	19,267.65	16,411.76
PAT	14,926.60	12,314.98
Total Comprehensive Income for the year	14,919.99	12,300.06
Basic EPS (?)	20.15	18.18

Key highlights of the segment-wise financial performance are summarised below:

(Rs in Lakhs)

Particulars	Standalone		Consolidated
	March 31, 2025	March 31, 20241	March 31, 2025	March 31, 2024
a) Broking and Related Services
1) Fees and commission income*	19,067.42	18077.92	19,067.42	18,040.59
2) Interest Income	10,842.83	7198.84	10,842.83	7,236.07
3) Net Gain/(Loss) on Fair Value	2,328.63	1804.73	2,328.63	1,804.73
Changes
4) Other Income	57.36	98.41	57.36	98.41
b) Non-Banking Financial Business	-	-	663.31	825.96
c) Insurance business	-	-	153.46	168.26
Less: Inter Segment Revenue	-	-	(315.57)	(274.35)
Total	32,296.24	27,179.90	32,797.45	27,899.68

* Fees and commission income include revenue from Broking, Merchant banking and Asset management services.

HUMAN RESOURCES/INDUSTRY RELATIONS

In the service industry, particularly financial services, a skilled and motivated workforce is paramount. Recognising this, MNCL prioritises its human capital by implementing robust HR practices. The Company offers ongoing training and motivational programmes to ensure the staff reach their full potential and deliver exceptional client service.

Investing in people: MNCL recognises that human capital is the cornerstone of success in the service industry, especially financial services. The Company fosters a healthy HR environment that prioritises continuous learning and development for its staff. Through training and motivational initiatives, the Company empowers its employees to reach their full potential and deliver exceptional service to clients.

A thriving workplace: The Company provides a stimulating and supportive work environment that encourages innovation and collaboration. This commitment to employee well-being fosters a culture of excellence, ensuring the team is well- equipped to tackle any challenge and drives the Company towards achieving its mission with unwavering success.

Strong Business Relationships: MNCL actively cultivates positive and productive relationships within the industry. This proactive approach strengthens its reputation and enhances the Companys overall creditworthiness.

ENVIRONMENTAL ISSUES

As the Company is not in the field of manufacturing, the matter relating to the production of any harmful gases and the liquid effluents is not applicable.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Particulars	FY 2024-25	FY 2023-24
Return on Networth declined because of equity fund raise of Rs 300 Cr during the year	26.1%	43.4%

CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis describing the Companys objectives, expectations or predictions may be forward-looking within the meaning of applicable securities, laws and regulations. Actual results may differ materially from those expressed in the statement. Several factors could make a significant difference to the Companys operation. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities, etc. over which the Company does not have any control.